| dc.description.abstract | In recent years, the firms which produce high-tech products face more and more challenges, and their production cost is also getting higher and higher. Moreover, more and more governments now levy the environmental tax on the firms since the processing of high-tech products usually generates lots of pollutions. Therefore, many firms now pay attention on how to saving their inputs. A saving more inputs is not only reducing its material inventories but also saving the demand for energy and generating less pollutions. However, as per our knowledge, no study has taken this issue into account among R&D theoretical papers.
This paper establishes different model under different consideration in three chapters to analyze the strategic interactions between upstream firms’ pricing strategies and downstream firms’ decision over R&D input saving. Our findings are as follows. In chapter 2, we consider that the upstream market is perfectly competitive or monopoly to investigate this issue. In this chapter, we find that a higher price of the intermediate goods may not induce the downstream firm to undertake more R&D or produce less outputs. In addition, a higher efficiency of R&D may not induce the upstream firm to charge a lower price. Moreover, we find that the upstream market becoming more competitive does not imply that the downstream firm will produce more outputs.
In chapter 3, we further consider that the downstream market is duopoly, and the aims of this chapter is to investigate the upstream firm’s optimal pricing strategies under the R&D strategy of downstream duopolists is cooperative R&D or non-cooperative R&D. In this chapter, we find that a higher price of intermediate goods may not induce downstream firms to conduct R&D. Besides, we also find that the optimal R&D investments under cooperative R&D and non-cooperative R&D may be higher than the first-best allocation’s R&D investment.
In the chapter 4, we reverse the game structure that the upstream firm will determine its price after the downstream firm conduct its R&D for input saving. Moreover, we are also interested in that if the downstream firm processing the intermediate goods will cause pollutions and the government thus levies the environmental tax on it, how the environmental tax affects the downstream firm’s R&D strategy. We find that the downstream firm undertaking R&D will induce the upstream firm to charge a higher price but that may not generate more pollutions under the downstream firm producing more outputs of final goods. Finally, we find a different result comparing with the chapter 1. That is, the downstream firm undertaking R&D may increase the upstream firm’s profit.
| en_US |